4 ms·

I have read a lot about passive investing (The Intelligent Investor, Mr Money Mustache etc.) but I live in France and it does not seem as simple as in the US to

by nchrys 10y ago

I have read a lot about passive investing (The Intelligent Investor, Mr Money Mustache etc.) but I live in France and it does not seem as simple as in the US to invest in a SP500 index fund for example. Especially if you want something that is quite tax efficient. Does anyone have any advice?

hackerboos 10y ago
France doesn't have an ISA/Roth IRA/TFSA equivalent? Google tells me - PEA (Plan d'Epargne en Actions) - but this info was from 2006.
- jklepatch 10y ago
  Thats right. With a PEA you can avoid capital taxes provided you hold your stocks long enough. As per how to open a brokerage account for alien non US resident, several years ago I managed to open an account at interactive broker while living in hong kong. They have among the lowest fees of all brokers and good software. Pretty sure its also possible to open an account while residing in france. One thing to note though: as an alien non US resident, any US dividends will be taxed at 30pct in the US, directly deducted by the brokerage company
late2part 10y ago
Open an investment account in the USA - it's fairly straightforward. I don't know your tax system in france, but you can invest in the US as an individual or an entity, probably worth talking w/ a tax attorney about how to do it - it's certainly done by others.
- cylinder 10y ago
  Don't think it's that straightforward. Probably need a SSN and there will be tax withholding of earnings
  - late2part 10y ago
    Process here. Not trivial but not insurmountable. https://www.irs.gov/uac/form-w-8ben-certificate-of-foreign-status-of-beneficial-owner-for-united-states-tax-withholding https://www.irs.gov/uac/form-w-8ben-certificate-of-foreign-s... https://us.etrade.com/e/t/estation/contexthelp?id=1202010000 https://us.etrade.com/e/t/estation/contexthelp?id=1202010000 Open an ETRADE Securities account if I'm neither a legal resident of the U.S. nor a U.S. citizen You won't be able to open a brokerage account online if you are not a legal resident or citizen of the United States because we will need some additional documentation from you. If you're not sure if you're a legal resident, see the Help topic Determine my residency status. Request a brokerage account application by mail, or download it from our Forms & Applications page. Download a Form W-8BEN. Complete sections 1 through 6 of the application (the section on options trading isn't required). Send your completed application and Form W-8BEN, along with your initial deposit and any supporting documentation, to us at: By regular U.S. mail ETRADE Securities LLC PO Box 484 Jersey City, NJ 07303 - 0484 By overnight mail E*TRADE Securities LLC Harborside Financial Center 501 Plaza 2 34 Exchange Place Jersey City, NJ 07311 1-800-ETRADE-1
pdog 10y ago
Invest in a cheap French or Eurozone total market index fund. It only makes sense to invest in a fund that matches your local currency.
- pbhjpbhj 10y ago
  >It only makes sense to invest in a fund that matches your local currency. // Why? Surely investing in a higher growth economy is better?
  - desas 10y ago
    You're now exposed to foreign exchange risks too
    - tomcam 10y ago
      Conversely, it could be a smart diversification move
Huppie 10y ago
Just want to chime in to say that using a broker to buy index funds should be possible in France as well. I'm in The Netherlands and use DeGiro[1] which is available in France as well, so that might be an option. My investment portfolio basically consists of a few index funds, all can be bought once per month with this broker without a brokerage fee. As for tax-efficient ways, my french isn't that good so I don't know the details but if I understand this topic [2] correctly you should have some options like PEA, PERCO/PERP, and/or PEE/PEI/PEG N.B.: There will always be some discussion around this specific broker because their 'default account' contains a clause where this broker is allowed to temporarily loan your assets to other customers. Don't do this. You can get a so-called 'custody account' (which is basically a regular brokerage account) that's only marginally more expensive. [1]: https://www.degiro.fr https://www.degiro.fr [2]: http://redd.it/3oht1m/ http://redd.it/3oht1m/

by nchrys 10y ago

hackerboos 10y ago

France doesn't have an ISA/Roth IRA/TFSA equivalent? Google tells me - PEA (Plan d'Epargne en Actions) - but this info was from 2006.

jklepatch 10y ago
Thats right. With a PEA you can avoid capital taxes provided you hold your stocks long enough. As per how to open a brokerage account for alien non US resident, several years ago I managed to open an account at interactive broker while living in hong kong. They have among the lowest fees of all brokers and good software. Pretty sure its also possible to open an account while residing in france. One thing to note though: as an alien non US resident, any US dividends will be taxed at 30pct in the US, directly deducted by the brokerage company

late2part 10y ago

Open an investment account in the USA - it's fairly straightforward. I don't know your tax system in france, but you can invest in the US as an individual or an entity, probably worth talking w/ a tax attorney about how to do it - it's certainly done by others.

cylinder 10y ago
Don't think it's that straightforward. Probably need a SSN and there will be tax withholding of earnings
- late2part 10y ago
  Process here. Not trivial but not insurmountable. https://www.irs.gov/uac/form-w-8ben-certificate-of-foreign-status-of-beneficial-owner-for-united-states-tax-withholding https://www.irs.gov/uac/form-w-8ben-certificate-of-foreign-s... https://us.etrade.com/e/t/estation/contexthelp?id=1202010000 https://us.etrade.com/e/t/estation/contexthelp?id=1202010000 Open an ETRADE Securities account if I'm neither a legal resident of the U.S. nor a U.S. citizen You won't be able to open a brokerage account online if you are not a legal resident or citizen of the United States because we will need some additional documentation from you. If you're not sure if you're a legal resident, see the Help topic Determine my residency status. Request a brokerage account application by mail, or download it from our Forms & Applications page. Download a Form W-8BEN. Complete sections 1 through 6 of the application (the section on options trading isn't required). Send your completed application and Form W-8BEN, along with your initial deposit and any supporting documentation, to us at: By regular U.S. mail ETRADE Securities LLC PO Box 484 Jersey City, NJ 07303 - 0484 By overnight mail E*TRADE Securities LLC Harborside Financial Center 501 Plaza 2 34 Exchange Place Jersey City, NJ 07311 1-800-ETRADE-1

pdog 10y ago

Invest in a cheap French or Eurozone total market index fund. It only makes sense to invest in a fund that matches your local currency.

pbhjpbhj 10y ago
>It only makes sense to invest in a fund that matches your local currency. // Why? Surely investing in a higher growth economy is better?
- desas 10y ago
  You're now exposed to foreign exchange risks too
  - tomcam 10y ago
    Conversely, it could be a smart diversification move

Huppie 10y ago

Just want to chime in to say that using a broker to buy index funds should be possible in France as well. I'm in The Netherlands and use DeGiro[1] which is available in France as well, so that might be an option. My investment portfolio basically consists of a few index funds, all can be bought once per month with this broker without a brokerage fee. As for tax-efficient ways, my french isn't that good so I don't know the details but if I understand this topic [2] correctly you should have some options like PEA, PERCO/PERP, and/or PEE/PEI/PEG N.B.: There will always be some discussion around this specific broker because their 'default account' contains a clause where this broker is allowed to temporarily loan your assets to other customers. Don't do this. You can get a so-called 'custody account' (which is basically a regular brokerage account) that's only marginally more expensive. [1]: https://www.degiro.fr https://www.degiro.fr [2]: http://redd.it/3oht1m/ http://redd.it/3oht1m/